Understanding Cryptocurrency Charts [What Newbie Traders Should Know]

There is more to virtual currency than meets the eye; while investing in virtual currency may be common for some, there is much more to consider from time to time. Handling your virtual currency investment, especially big amounts, would necessitate analysis of the graphs as well as the most recent updates. In cryptocurrency movements, both externally and internally factors should be considered. Aside from basic supply and demand, there is the trend of most financial institutions’ buying methods, developments started by personal coins or cryptocurrency, and alt season. Some of the aspects include the world’s and individual countries’ economic status, publicity from well-known names in the crypto industry, and much more. Along with all the aspects mentioned, the outcome will most probably be seen in the value of each cryptocurrency like bitcoin, particularly the charts. There are numerous real-time chart updates for each cryptocurrency right now. It’s so wild that there’s a movement for every second. As a result, it illustrates the cryptocurrency’s volatility. The graph demonstrates the patterns and motions of the cryptocurrency’s worth, and most shareholders use them to construct their investment strategy.

Despite their complexity, numbers are still numbers. What they are is symbolised by digits or numbers. Usually, there are only upward or downward trends on graphs, relying on what the virtual currency is experiencing. As explained previously, it is the location where venture capitalists or traders gather chances and forecast future potentials or value movement patterns of an asset. In most cases, simple observation of these charts would be insufficient in a single sitting. That is why there is deep analysis, which will lead you to a pattern accumulated over time. This will lead you to a more in-depth knowledge of how supply and demand can affect future movements or price changes. While on the topic of analysis, there are lots of sites around the web that can provide you with helpful information about the crypto market and one of them is BiteMyCoin. This website is beginner-friendly and it’s a perfect start if you are new to the cryptocurrency world.

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Technical Analysis: An Overview

There are various approaches to analysing the financial markets and their graphs, but on a profound level, technical analysis implies analysing previous financial transactions and price fluctuations. Forecast prices are critical in trading and investing. This is also used in the stock market, commodity markets, and fiat money.

Charles Dow, the founding member and publisher of the Wall Street Journal, as well as a co-founder of Dow Jones and Company, pioneered this approach. Dow was one of the inventors of the first stock market index. Many of Dow’s ideas were published in most of the editorials, which were then compiled into what is now known as the Dow’s Theory. There are some fundamentals that can enable us to understand the currency based on Dow’s theory.

One of the core rules of technical indicators is that the market is a representation of all the data and information, such as the asset value or cryptos as well as price fluctuations; for example, when an organisation is required to report positive earnings, its business value rises. If you are knowledgeable with trading, you will realise that this is similar to the market efficiency, which states that the present nature of the market reflects all existing knowledge, which can also be applied in the fair trade of value in stocks.

Dow Theory

According to Dow’s theory, there are different market trends that can be applied to the crypto market. These are known as primary, secondary, and tertiary trends. Of course, the primary trends are the ones that all markets encounter first. This trend is expected to last longer than the other two, which can last lead to different results or even years. The primary trend can be a bull market, in which the prices of the assets are being pulled upward, or a bear market, in which the prices of the assets are being stomped downward. Following the primary trend is the secondary trend, which may be opposing the primary trend. The secondary trend can be defined as pullbacks in the bull market, in which the asset’s value falls for a period of time. The secondary trend can also go against the bear market, in which the assets may move up for a period of time. This one could last a week or slightly longer in terms of tertiary trends. Some regard this trend as merely market noise that will have no impact on the long-term movement of the asset’s value. This may be overlooked by some, but it is worthy of investigation in order to improve estimation accuracy. These trends would look like three-peaked mountains if they were displayed in linear graphs. On the left side, there would be the largest and highest peaked mountain, followed by a smaller peaked mountain, followed by the smallest peaked mountain, which could also be a flat line. This is just one example of statistical analysis on a market situation, and it is critical for a trader to understand it. There will continue to be other interpretations and analyses of how the crypto market is moving, and it is best to stay updated at all times. Even though these graphs are only guided to the cryptocurrency market trends, the assets may encounter price fluctuations from time – to – time because the industry is still volatile.

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About the author: Cory Weinberg

"Student. Subtly charming organizer. Certified music advocate. Writer. Lifelong troublemaker. Twitter lover."

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